B-123920, AUG. 5, 1955
Highlights
FRED SCHWARTZ AND IRVING COHEN: REFERENCE IS MADE TO YOUR LETTER OF JUNE 6. THE FACTS AND CIRCUMSTANCES REGARDING YOUR CLAIM WERE FULLY SET FORTH IN THE DECISION OF JUNE 2 AND WILL NOT BE REPEATED HERE. IT APPEARS FROM YOUR LETTER THAT YOU ARE OF THE OPINION THAT. SINCE RELIEF WAS GRANTED BY OUR OFFICE IN THE CASE OF KERR-MCGEE OIL INDUSTRIES. YOU ARE ENTITLED TO THE REFUND IN QUESTION. CITED IN THE DECISION OF JUNE 2 ARE OF NO GREATER LEGAL SIGNIFICANCE TO YOUR SITUATION THAN THAT UNDER WHICH RELIEF WAS GRANTED IN THE KERR MCGEE CASE. IN THE KERR-MCGEE CASE THE BIDDER ALLEGED ERROR PRIOR TO ANY AWARD AND FURNISHED EVIDENCE ESTABLISHING THAT AN ERROR WAS ACTUALLY MADE AS ALLEGED. IT WAS HELD IN THAT CASE THAT IT IS A FUNDAMENTAL PRINCIPLE OF LAW THAT THE ACCEPTANCE OF A BID WITH KNOWLEDGE OF AN ERROR DOES NOT CONSUMMATE A VALID AND BINDING CONTRACT AND COURT CASES ADHERING TO THAT PRINCIPLE WERE CITED IN THE DECISION GRANTING RELIEF.
B-123920, AUG. 5, 1955
TO MESSRS. FRED SCHWARTZ AND IRVING COHEN:
REFERENCE IS MADE TO YOUR LETTER OF JUNE 6, 1955, REQUESTING RECONSIDERATION OF OFFICE DECISION DATED JUNE 2, 1955, WHICH SUSTAINED THE DISALLOWANCE OF YOUR CLAIM FOR $600 AS REFUND OF YOUR BID DEPOSIT MADE IN CONNECTION WITH CONTRACT NO. N665S-19474, DATED OCTOBER 26, 1954.
THE FACTS AND CIRCUMSTANCES REGARDING YOUR CLAIM WERE FULLY SET FORTH IN THE DECISION OF JUNE 2 AND WILL NOT BE REPEATED HERE, EXCEPT TO THE EXTENT NECESSARY TO ANSWER YOUR PRESENT CONTENTION THAT RELIEF SHOULD BE GRANTED ON THE BASIS THAT YOU MADE AN ERROR IN YOUR BID.
IT APPEARS FROM YOUR LETTER THAT YOU ARE OF THE OPINION THAT, SINCE RELIEF WAS GRANTED BY OUR OFFICE IN THE CASE OF KERR-MCGEE OIL INDUSTRIES, INC., BECAUSE OF ITS ESTABLISHED ERROR IN BID, YOU ARE ENTITLED TO THE REFUND IN QUESTION. YOU STATE, IN EFFECT, THAT THE CASES OF UNITED STATES V. PURCELL ENVELOPE COMPANY, 249 U.S. 313, AND AMERICAN SMELTING AND REFINING COMPANY V. UNITED STATES, 295 U.S. 75, CITED IN THE DECISION OF JUNE 2 ARE OF NO GREATER LEGAL SIGNIFICANCE TO YOUR SITUATION THAN THAT UNDER WHICH RELIEF WAS GRANTED IN THE KERR MCGEE CASE.
IN THE KERR-MCGEE CASE THE BIDDER ALLEGED ERROR PRIOR TO ANY AWARD AND FURNISHED EVIDENCE ESTABLISHING THAT AN ERROR WAS ACTUALLY MADE AS ALLEGED. IT WAS HELD IN THAT CASE THAT IT IS A FUNDAMENTAL PRINCIPLE OF LAW THAT THE ACCEPTANCE OF A BID WITH KNOWLEDGE OF AN ERROR DOES NOT CONSUMMATE A VALID AND BINDING CONTRACT AND COURT CASES ADHERING TO THAT PRINCIPLE WERE CITED IN THE DECISION GRANTING RELIEF. IN YOUR CASE IT WAS DETERMINED THAT THE AWARD WAS MADE TO YOU ON THE BASIS THAT YOUR BID WAS A "LEGITIMATELY DELAYED BID" WITHIN THE MEANING OF THAT TERM AS USED IN THE APPLICABLE REGULATIONS AND THERE WAS NO BASIS FOR CONCLUDING THAT THE AWARD WAS NOT MADE IN GOOD FAITH SINCE NO EVIDENCE TO ESTABLISH AN ERROR HAD BEEN FURNISHED AND THERE WAS NOTHING IN THE BID TO PUT THE CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ANY ERROR IN YOUR BID. THEREFORE AND SINCE, AS A MATTER OF FACT, YOUR BID AS SUPPLEMENTED BY YOUR FOLLOW-UP TELEGRAPHIC REQUEST FOR CONSIDERATION WAS SHOWN TO HAVE BEEN AS INTENDED WHEN SUBMITTED, IT MUST BE CONCLUDED THAT THE VALIDITY OF THE CONTRACT RESULTING FROM ACCEPTANCE OF THE BID IS CONTROLLED BY THE LEGAL PRINCIPLES ANNOUNCED BY THE UNITED STATES SUPREME COURT IN THE CASES CITED.
ACCORDINGLY, WE HAVE NO ALTERNATIVE BUT TO ADHERE TO THE CONCLUSION PREVIOUSLY REACHED IN THIS MATTER.